ICARDIA HEALTHCARE CORPORATION LONG-TERM INCENTIVE PLAN
ICARDIA
HEALTHCARE CORPORATION
LONG-TERM
INCENTIVE PLAN
Exhibit
10.3
TABLE
OF CONTENTS
1
|
|
DEFINITIONS
|
1
|
Affiliate
|
1
|
Award
|
2
|
Award
Agreement
|
2
|
Board
|
2
|
Cash
Award
|
2
|
Code
|
2
|
Committee
|
2
|
Common
Stock
|
2
|
Company
|
2
|
Disability
or Disabled
|
3
|
Dividend
Equivalent
|
3
|
|
|
Eligible
Employee
|
3
|
Exchange
Act
|
3
|
Fair
Market Value
|
3
|
Incentive
Option
|
3
|
Key
Non-Employee
|
3
|
Non-Employee
Board Member
|
3
|
Nonstatutory
Option
|
4
|
Option
|
4
|
Other
Stock-Based Award
|
4
|
Participant
|
4
|
Exhibit
10.3
i
Performance
Award
|
4
|
|
|
Plan
|
4
|
Restricted
Stock
|
4
|
Right
|
4
|
Shares
|
4
|
SHARES
SUBJECT TO THE PLAN
|
4
|
ADMINISTRATION
OF THE PLAN
|
5
|
ELIGIBILITY
FOR PARTICIPATION
|
7
|
AWARDS
UNDER THIS PLAN
|
7
|
Incentive
Option
|
7
|
Nonstatutory
Option
|
8
|
Restricted
Stock
|
8
|
Stock
Appreciation Right
|
8
|
Dividend
Equivalents
|
8
|
Other
Stock-Based Awards
|
8
|
Performance
Awards
|
8
|
Cash
Awards
|
8
|
TERMS
AND CONDITIONS OF INCENTIVE OPTIONS AND NONSTATUTORY
|
|
OPTIONS
|
9
|
Option
Price
|
9
|
|
|
Number
of Shares
|
9
|
Term
of Option
|
9
|
Date
of Exercise
|
9
|
Medium
of Payment
|
10
|
Exhibit
10.3
ii
Termination
of Employment
|
10
|
|
|
Total
and Permanent Disability
|
11
|
Death
|
12
|
Exercise
of Option and Issuance of Stock
|
12
|
Rights
as a Stockholder
|
13
|
Assignability
and Transferability of Option
|
13
|
Other
Provisions
|
13
|
Purchase
for Investment
|
14
|
TERMS
AND CONDITIONS OF RESTRICTED STOCK
|
14
|
TERMS
AND CONDITIONS OF STOCK APPRECIATION RIGHTS
|
16
|
TERMS
AND CONDITIONS OF DIVIDEND EQUIVALENTS
|
16
|
TERMS
AND CONDITIONS OF OTHER STOCK-BASED AWARDS
|
17
|
TERMS
AND CONDITIONS OF PERFORMANCE AWARDS
|
17
|
TERMS
AND CONDITIONS OF CASH AWARDS
|
19
|
TERMINATION
OF EMPLOYMENT OR SERVICE
|
19
|
Retirement
under a Company or Affiliate Retirement Plan
|
19
|
Termination
in the Best Interests of the Company or an Affiliate
|
19
|
Death
or Disability of a Participant
|
20
|
CANCELLATION
AND RESCISSION OF AWARDS
|
20
|
PAYMENT
OF RESTRICTED STOCK, RIGHTS, OTHER STOCK-BASED
|
|
AWARDS,
PERFORMANCE AWARDS AND CASH AWARDS
|
22
|
WITHHOLDING
|
22
|
SAVINGS
CLAUSE
|
22
|
Exhibit
10.3
iii
ADJUSTMENTS
UPON CHANGES IN CAPITALIZATION; CORPORATE
|
|
TRANSACTIONS
|
23
|
DISSOLUTION
OR LIQUIDATION OF THE COMPANY
|
24
|
TERMINATION
OF THE PLAN
|
24
|
AMENDMENT
OF THE PLAN
|
24
|
EMPLOYMENT
RELATIONSHIP
|
24
|
INDEMNIFICATION
OF COMMITTEE
|
25
|
UNFUNDED
PLAN
|
25
|
MITIGATION
OF EXCISE TAX
|
25
|
EFFECTIVE
DATE
|
26
|
INFORMATION
|
26
|
FOREIGN
JURISDICTIONS
|
26
|
26
|
|
GOVERNING
LAW
|
27
|
Exhibit
10.3
iv
ICARDIA
HEALTHCARE CORPORATION
LONG-TERM
INCENTIVE PLAN
I.
|
PURPOSE
|
The
iCardia Healthcare Corporation Long-Term Incentive Plan is adopted effective
November 15, 2004. The Plan is designed to attract, retain and motivate
selected Eligible Employees and Key Non-Employees of the Company and its
Affiliates, and reward them for making major contributions to the success of
the
Company and its Affiliates. These objectives are accomplished by making
long-term incentive awards under the Plan that will offer Participants an
opportunity to have a greater proprietary interest in, and closer identity
with,
the Company and its Affiliates and their financial success.
The
Awards may consist of:
1.
|
Incentive
Options;
|
2.
|
Nonstatutory
Options;
|
3.
|
Restricted
Stock;
|
4.
|
Rights;
|
5.
|
Dividend
Equivalents;
|
6.
|
Other
Stock-Based Awards;
|
7.
|
Performance
Awards; or
|
8.
|
Cash
Awards;
|
or
any
combination of the foregoing, as the Committee may determine.
The
Plan
is intended to qualify certain compensation awarded under the Plan for tax
deductibility under Section 162(m) of the Code to the extent deemed appropriate
by the Committee. The Plan and the grant of Awards hereunder are expressly
conditioned upon the Plan's approval by the stockholders of the Company. If
such
approval is not obtained, then this Plan and all Awards hereunder shall be
null
and void ab initio.
II.
|
DEFINITIONS
|
A. Affiliate
means
any individual, corporation, partnership, association, limited liability
company, joint-stock company, trust, unincorporated association or other entity
(other than the Company) that, for purposes of Section 424 of the Code, is
a
parent or subsidiary of the Company, direct or indirect.
Exhibit
10.3
B. Award
means
the grant to any Eligible Employee or Key Non-Employee of any form of Option,
Restricted Stock, Right, Dividend Equivalent, Other Stock-Based Award,
Performance Award, or Cash Award, whether granted singly, in combination, or
in
tandem, and pursuant to such terms, conditions, and limitations as the Committee
may establish in order to fulfill the objectives of the Plan.
C. Award
Agreement
means a
written agreement entered into between the Company and a Participant under
which
an Award is granted and which sets forth the terms, conditions, and limitations
applicable to the Award.
D. Board
means
the
Board of Directors of the Company.
E. Cash
Award
means an
Award of cash, subject to the requirements of Article XIII and such other
restrictions as the Committee deems appropriate or desirable.
F. Code
means
the
Internal Revenue Code of 1986, as amended from time to time, or any successor
statute thereto. References to any provision of the Code shall be deemed to
include regulations thereunder and successor provisions and regulations
thereto.
G. Committee
means
the
committee to which the Board delegates the power to act under or pursuant to
the
provisions of the Plan, or the Board if no committee is selected. If the Board
delegates powers to a committee, and if the Company is or becomes subject to
Section 16 of the Exchange Act, then, if necessary for compliance therewith,
such committee shall consist initially of not less than two (2) members of
the
Board, each member of which must be a "non-employee director," within the
meaning of the applicable rules promulgated pursuant to the Exchange Act. If
the
Company is or becomes subject to Section 16 of the Exchange Act, no member
of the Committee shall receive any Award pursuant to the Plan or any similar
plan of the Company or any Affiliate while serving on the Committee, unless
the
Board determines that the grant of such an Award satisfies the then current
Rule 16b-3 requirements under the Exchange Act. Notwithstanding anything
herein to the contrary, and insofar as the Board determines that it is desirable
in order for compensation recognized by Participants pursuant to the Plan to
be
fully deductible to the Company for federal income tax purposes, each member
of
the Committee also shall be an "outside director" (as defined in regulations
or
other guidance issued by the Internal Revenue Service under Code Section
162(m)).
H. Common
Stock
means
the common stock of the Company.
I. Company
means
iCardia Healthcare Corporation, a Delaware corporation, and includes any
successor or assignee corporation or corporations into which the Company may
be
merged, changed, or consolidated; any corporation for whose securities the
securities of the Company shall be exchanged; and any assignee of or successor
to substantially all of the assets of the Company.
Exhibit
10.3
2
J. Disability
or Disabled
means a
permanent and total disability as defined in Section 22(e)(3) of the
Code.
K. Dividend
Equivalent
means an
Award subject to the requirements of Article XI.
L. Eligible
Employee
means an
employee of the Company or of an Affiliate who is designated by the Committee
as
being eligible to be granted one or more Awards under the Plan.
M. Exchange
Act
means
the Securities Exchange Act of 1934, as amended from time to time, or any
successor statute thereto. References to any provision of the Exchange Act
shall
be deemed to include rules promulgated thereunder and successor provisions
and
rules thereto.
N. Fair
Market Value
means,
if the Shares are listed on any national securities exchange, the closing sales
price, if any, on the largest such exchange on the valuation date, or, if none,
on the most recent trade date immediately prior to the valuation date provided
such trade date is no more than thirty (30) days prior to the valuation date.
If
the Shares are not then listed on any such exchange, the fair market value
of
such Shares shall be the closing sales price if such is reported, or otherwise
the mean between the closing "Bid" and the closing "Ask" prices, if any, as
reported in the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") for the valuation date, or if none, on the most recent trade
date immediately prior to the valuation date provided such trade date is no
more
than thirty (30) days prior to the valuation date. If the Shares are not then
either listed on any such exchange or quoted in NASDAQ, or there has been no
trade date within such thirty (30) day period, the fair market value shall
be
the mean between the average of the "Bid" and the average of the "Ask" prices,
if any, as reported in the National Daily Quotation System for the valuation
date, or, if none, for the most recent trade date immediately prior to the
valuation date provided such trade date is no more than thirty (30) days prior
to the valuation date. If the fair market value cannot be determined under
the
preceding three sentences, it shall be determined in good faith by the
Committee.
O. Incentive
Option
means an
Option that, when granted, is intended to be an "incentive stock option," as
defined in Section 422 of the Code.
P. Key
Non-Employee
means a
Non-Employee Board Member, consultant, advisor or independent contractor of
the
Company or of an Affiliate who is designated by the Committee as being eligible
to be granted one or more Awards under the Plan.
Q. Non-Employee
Board Member means
a
director of the Company who is not an employee of the Company or any of its
Affiliates. For purposes of the Plan, a Non-Employee Board Member shall be
deemed to include the employer or other designee of such Non-Employee Board
Member, if the Non-Employee Board Member is required, as a condition of his
or
her employment, to provide that any Award granted hereunder be made to the
employer or other designee.
Exhibit
10.3
3
R. Nonstatutory
Option
means an
Option that, when granted, is not intended to be an "incentive stock option,"
as
defined in Section 422 of the Code, or that subsequently fails to comply
with the requirements of Section 422 of the Code.
S. Option
means a
right or option to purchase Common Stock, including Restricted Stock if the
Committee so determines.
T. Other
Stock-Based Award means
a
grant or sale of Common Stock that is valued in whole or in part based upon
the
Fair Market Value of Common Stock.
U. Participant
means an
Eligible Employee or Key Non-Employee to whom one or more Awards are granted
under the Plan.
V. Performance
Award
means an
Award subject to the requirements of Article XIII, and such performance
conditions as the Committee deems appropriate or desirable.
W. Plan
means
the iCardia Healthcare Corporation Long-Term Incentive Plan, as amended from
time to time.
X. Restricted
Stock
means an
Award made in Common Stock or denominated in units of Common Stock and delivered
under the Plan, subject to the requirements of Article VIII, such other
restrictions as the Committee deems appropriate or desirable, and as awarded
in
accordance with the terms of the Plan.
Y. Right
means a
stock appreciation right delivered under the Plan, subject to the requirements
of Article X and as awarded in accordance with the terms of the
Plan.
Z. Shares
means
the following shares of the capital stock of the Company as to which Options
or
Restricted Stock have been or may be granted under the Plan and upon which
Rights, units of Restricted Stock or Other Stock-Based Awards may be based:
treasury or authorized but unissued Common Stock, $.001 par value, of the
Company, or any shares of capital stock into which the Shares are changed or
for
which they are exchanged within the provisions of Article XX of the
Plan.
III. SHARES
SUBJECT TO THE PLAN
The
aggregate number of Shares as to which Awards may be granted from time to time
shall be Five Million Four Hundred Thousand (5,400,000) Shares (subject to
adjustment for stock splits, stock dividends, and other adjustments described
in
Article XX hereof); provided, however, that the number of Shares available
for
issuance under the Plan shall automatically increase on the first trading day
of
each calendar during the term of the Plan by an amount equal to ten percent
(10%) of the increase, if any, in the number of shares of the capital stock
outstanding on the last trading day of December of the immediately preceding
calendar year less the number of shares of the capital stock of the Company
outstanding on January 1 of the preceding calendar year. The
aggregate number of Shares as to which Incentive Options may be granted from
time to time shall be Five Million Four Hundred Thousand (5,400,000) Shares
(subject to adjustment for stock splits, stock dividends and other adjustments
described in Article VI hereof).
No
Incentive Options may be granted on the basis of the additional Shares resulting
from such annual increases.
Exhibit
10.3
4
In
accordance with Code Section 162(m), if applicable, the aggregate number of
Shares as to which Awards may be granted in any one calendar year to any one
Eligible Employee shall not exceed Two Million (2,000,000) Shares (subject
to
adjustment for stock splits, stock dividends, and other adjustments described
in
Article XX hereof). Notwithstanding the foregoing, the aggregate number of
Shares issuable upon exercise of all outstanding Awards shall not exceed a
number of Shares which is equal to thirty percent (30%) of the then outstanding
shares of the Company, as calculated in accordance with the conditions and
exclusions of California Corporate Securities Rule 260.140.45, unless a
percentage higher than thirty percent (30%) is approved by at least two-thirds
(2/3) of the outstanding Shares entitled to vote.
From
time
to time, the Committee and/or appropriate officers of the Company shall take
whatever actions are necessary to file required documents with governmental
authorities and/or stock exchanges so as to make Shares available for issuance
pursuant to the Plan. Shares subject to Awards that are forfeited, terminated,
expire unexercised, canceled by agreement of the Company and the Participant
(whether for the purpose of repricing such Awards or otherwise), settled in
cash
in lieu of Common Stock or in such manner that all or some of the Shares covered
by such Awards are not issued to a Participant (or, if issued to the
Participant, are returned to the Company by the Participant pursuant to a right
of repurchase or right of first refusal exercised by the Company), or are
exchanged for Awards that do not involve Common Stock, shall immediately become
available for Awards. In addition, if the exercise price of any Award is
satisfied by tendering Shares to the Company (by actual delivery or
attestation), only the number of Shares issued net of the Shares tendered shall
be deemed delivered for purposes of determining the maximum number of Shares
available for Awards. Awards payable in cash shall not reduce the number of
Shares available for Awards under the Plan.
IV.
|
ADMINISTRATION
OF THE PLAN
|
The
Plan
shall be administered by the Committee. A majority of the Committee shall
constitute a quorum at any meeting thereof (including by telephone conference)
and the acts of a majority of the members present, or acts approved in writing
by a majority of the entire Committee without a meeting, shall be the acts
of
the Committee for purposes of this Plan. The Committee may authorize one or
more
of its members or an officer of the Company to execute and deliver documents
on
behalf of the Committee. A member of the Committee shall not exercise any
discretion respecting himself or herself under the Plan. The Board shall have
the authority to remove, replace or fill any vacancy of any member of the
Committee upon notice to the Committee and the affected member. Any member
of
the Committee may resign upon notice to the Board. The Committee may allocate
among one or more of its members, or may delegate to one or more of its agents,
such duties and responsibilities as it determines. Subject to the provisions
of
the Plan, the Committee is authorized to:
A. Interpret
the provisions of the Plan and any Award or Award Agreement, and make all rules
and determinations that it deems necessary or advisable to the administration
of
the Plan;
Exhibit
10.3
5
B. Determine
which employees of the Company or an Affiliate shall be designated as Eligible
Employees and which of the Eligible Employees shall be granted
Awards;
C. Determine
the Key Non-Employees to whom Awards, other than Incentive Options and
Performance Awards for which Key Non-Employees shall not be eligible, shall
be
granted;
D. Determine
whether an Option to be granted shall be an Incentive Option or Nonstatutory
Option;
E. Determine
the number of Shares for which an Option, Restricted Stock or Other Stock-Based
Award shall be granted;
X. Xxxxxxxxx
the number of Rights, the Cash Award or the Performance Award to be
granted;
G. Provide
for the acceleration of the right to exercise any Award; and
H. Specify
the terms, conditions, and limitations upon which Awards may be
granted;
provided,
however, that with respect to Incentive Options, all such interpretations,
rules, determinations, terms, and conditions shall be made and prescribed in
the
context of preserving the tax status of the Incentive Options as “incentive
stock options” within the meaning of Section 422 of the Code.
If
permitted by applicable law, and in accordance with any such law, the
Committee may delegate to the chief executive officer and to other senior
officers of the Company or its Affiliates its duties under the Plan pursuant
to
such conditions or limitations as the Committee may establish, except that
only
the Committee may select, and grant Awards to, Participants who are subject
to
Section 16 of the Exchange Act. All determinations of the Committee shall
be made by a majority of its members. No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan
or
any Award.
The
Committee shall have the authority at any time to cancel Awards for reasonable
cause and/or to provide for the conditions and circumstances under which Awards
shall be forfeited.
Any
determination made by the Committee pursuant to the provisions of the Plan
shall
be made in its sole discretion, and in the case of any determination relating
to
an Award, may be made at the time of the grant of the Award or, unless in
contravention of any express term of the Plan or any Agreement, at any time
thereafter. All decisions made by the Committee pursuant to the provisions
of
the Plan shall be final and binding on all persons, including the Company and
the Participants. No determination shall be subject to de novo
review
if challenged in court.
Exhibit
10.3
6
V. ELIGIBILITY
FOR PARTICIPATION
Awards
may be granted under this Plan only to Eligible Employees and Key Non-Employees
of the Company or its Affiliates. The foregoing notwithstanding, each
Participant receiving an Incentive Option must be an Eligible Employee of the
Company or of an Affiliate at the time the Incentive Option is
granted.
The
Committee may, at any time and from time to time, grant one or more Awards
to
one or more Eligible Employees or Key Non-Employees and may designate the number
of Shares, if applicable, to be subject to each Award so granted, provided,
however that no Incentive Option shall be granted after the expiration of ten
(10) years from the earlier of the date of the adoption of the Plan by the
Company or the approval of the Plan by the stockholders of the Company, and
provided further, that the Fair Market Value of the Shares (determined at the
time the Option is granted) as to which Incentive Options are exercisable for
the first time by any Eligible Employee during any single calendar year (under
the Plan and under any other incentive stock option plan of the Company or
an
Affiliate) shall not exceed One Hundred Thousand Dollars ($100,000). To the
extent that the Fair Market Value of such Shares exceeds One Hundred Thousand
Dollars ($100,000), the Shares subject to Option in excess of One Hundred
Thousand Dollars ($100,000) shall, without further action by the Committee,
automatically be converted to Nonstatutory Options.
Notwithstanding
any of the foregoing provisions, (i) the Committee may authorize the grant
of an Award to a person not then in the employ of, or engaged by, the Company
or
of an Affiliate, conditioned upon such person becoming eligible to be granted
an
Award at or prior to the execution of the Award Agreement evidencing the actual
grant of such Award; and (ii) if the Company is not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, then the
Committee may not authorize the grant of an Award under this Plan to a person
who resides in the State of California.
VI. AWARDS
UNDER THIS PLAN
As
the
Committee may determine, the following types of Awards may be granted under
the
Plan on a stand-alone, combination, or tandem basis:
A. Incentive
Option
An
Award
in the form of an Option that shall comply with the requirements of
Section 422 of the Code. Subject to adjustments in accordance with the
provisions of Article XX, the aggregate number of Shares that may be
subject to Incentive Options under the Plan shall not exceed Five Million Four
Hundred Thousand (5,400,000).
Exhibit
10.3
7
B. Nonstatutory
Option
An
Award
in the form of an Option that shall not be intended to, or has otherwise failed
to, comply with the requirements of Section 422 of the Code.
C. Restricted
Stock
An
Award
made to a Participant in Common Stock or denominated in units of Common Stock,
subject to future service and/or such other restrictions and conditions as
may
be established by the Committee, and as set forth in the Award Agreement,
including but not limited to continuous service with the Company or its
Affiliates, achievement of specific business objectives, increases in specified
indices, attainment of growth rates, and/or other measurements of Company or
Affiliate performance.
D. Stock
Appreciation Right
An
Award
in the form of a Right to receive the excess of the Fair Market Value of a
Share
on the date the Right is exercised over the Fair Market Value of a Share on
the
date the Right was granted.
E. Dividend
Equivalents
An
Award
in the form of, and based upon the value of, dividends of Shares.
F. Other
Stock-Based Awards
An
Award
made to a Participant in the form of Shares that are valued in whole or in
part
by reference to, or are otherwise based upon, the Fair Market Value of
Shares.
G. Performance
Awards
An
Award
made to a Participant that is subject to performance conditions specified by
the
Committee, including, but not limited to, continuous service with the Company
and/or its Affiliates, achievement of specific business objectives, increases
in
specified indices, attainment of growth rates, and/or other measurements of
Company or Affiliate performance.
H. Cash
Awards
An
Award
made to a Participant and denominated in cash, with the eventual payment subject
to future service and/or such other restrictions and conditions as may be
established by the Committee, and as set forth in the Award
Agreement.
Each
Award under the Plan shall be evidenced by an Award Agreement. Delivery of
an
Award Agreement to each Participant shall constitute an agreement between the
Company and the Participant as to the terms and conditions of the
Award.
Exhibit
10.3
8
VII.
|
TERMS
AND CONDITIONS OF INCENTIVE OPTIONS AND NONSTATUTORY
OPTIONS
|
Each
Option shall be set forth in an Award Agreement, duly executed on behalf of
the
Company and by the Participant to whom such Option is granted. Except for the
setting of the Option price under Paragraph A, no Option shall be granted and
no
purported grant of any Option shall be effective until such Award Agreement
shall have been duly executed on behalf of the Company and by the Participant.
Each such Award Agreement shall be subject to at least the following terms
and
conditions:
A. Option
Price
The
purchase price of the Shares covered by each Option granted under the Plan
shall
be determined by the Committee. The Option price per share of the Shares covered
by each Nonstatutory Option shall be at such amount as may be determined by
the
Committee in its sole discretion on the date of the grant of the Option;
provided, however, in the absence of a public market for the Common Stock,
the
Option price per share shall be determined by the Committee in a manner
consistent with Section 260.140.41(b) and 260.140.50 of Title 10 of the
California Code of Regulations. In the case of an Incentive Option, if the
Participant owns directly or by reason of the applicable attribution rules
ten
percent (10%) or less of the total combined voting power of all classes of
stock
of the Company, the Option price per share of the Shares covered by each
Incentive Option shall be not less than the Fair Market Value of the Shares
on
the date of the grant of the Incentive Option. In all other cases of Incentive
Options, the Option price shall be not less than one hundred ten percent (110%)
of the Fair Market Value of the Shares on the date of grant.
B. Number
of Shares
Each
Option shall state the number of Shares to which it pertains.
C. Term
of Option
Each
Incentive Option shall terminate not more than ten (10) years from the date
of
the grant thereof, or at such earlier time as the Award Agreement may provide,
and shall be subject to earlier termination as herein provided, except that
if
the Option price is required under Paragraph A of this Article VII to be at
least one hundred ten percent (110%) of Fair Market Value, each such Incentive
Option shall terminate not more than five (5) years from the date of the grant
thereof, and shall be subject to earlier termination as herein provided. The
Committee shall determine the time at which a Nonstatutory Option shall
terminate.
D. Date
of Exercise
Upon
the
authorization of the grant of an Option, or at any time thereafter, the
Committee may, subject to the provisions of Paragraph C of this Article VII,
prescribe the date or dates on which the Option becomes exercisable, and may
provide that the Option become exercisable in installments over a period of
years, and/or upon the attainment of stated goals. Unless the Committee
otherwise provides in writing, the date or dates on which the Option becomes
exercisable shall be tolled during any unpaid leave of absence. It is expressly
understood that Options hereunder shall, unless otherwise provided for in
writing by the Committee, be granted in contemplation of, and earned by the
Participant through the completion of, future employment or service with the
Company. The foregoing notwithstanding, any Option granted hereunder shall
be
exercisable at a rate of not less than twenty percent (20%) per year over five
(5) years from the date the Option is granted, subject to reasonable conditions
such as continued employment. However, in the case of an Option granted to
an
officer, director or consultant, the Award Agreement may provide that the Option
may become fully exercisable, subject to reasonable conditions such as continued
employment, at any time or during any period established in the Award
Agreement.
Exhibit
10.3
9
E.
|
Medium
of Payment
|
The
Option price shall be payable upon the exercise of the Option, as set forth
in
Paragraph I. It shall be payable in such form (permitted by Section 422 of
the Code in the case of Incentive Options) as the Committee shall, either by
rules promulgated pursuant to the provisions of Article IV of the Plan, or
in the particular Award Agreement, provide.
F. Termination
of Employment
1. A
Participant who ceases to be an employee or Key Non-Employee of the Company
or
of an Affiliate for any reason other than death, Disability, or termination
"for
cause," as defined in subparagraph (2) below, may exercise any Option granted
to
such Participant, to the extent that the right to purchase Shares thereunder
has
become exercisable by the date of such termination, but only within three (3)
(or such other period of time as the Committee may determine, with such
determination in the case of an Incentive Option being made at the time of
the
grant of the Option and not exceeding three (3) months) months after such date,
or, if earlier, within the originally prescribed term of the Option, and subject
to the conditions
that (i) no Option shall be exercisable after the expiration of the term of
the Option and (ii) unless the Committee otherwise provides, no Option that
has not become exercisable by the date of such termination shall at any time
thereafter be or become exercisable.
A
Participant's employment shall not be deemed terminated by reason of a transfer
to another employer that is the Company or an Affiliate.
2. A
Participant who ceases to be an employee or Key Non-Employee of the Company
or
of an Affiliate "for cause" shall, upon such termination, cease to have any
right to exercise any Option. For
purposes of this Plan, cause shall be as defined in any employment or other
agreement between the Participant and the Company (or an Affiliate) or, if
there
is no such agreement or definition therein, cause shall be defined to include
(i) a
Participant's theft or embezzlement, or attempted theft or embezzlement, of
money or property of the Company or of an Affiliate, a Participant's
perpetration or attempted perpetration of fraud, or a Participant's
participation in a fraud or attempted fraud, on the Company or an Affiliate
or a
Participant's unauthorized appropriation of, or a Participant's attempt to
misappropriate, any tangible or intangible assets or property of the Company
or
an Affiliate; (ii) any act or acts by a Participant of disloyalty,
dishonesty, misconduct, moral turpitude, or any other act or acts by a
Participant injurious to the interest, property, operations, business or
reputation of the Company or an Affiliate; (iii) a Participant's commission
of a felony or any other crime the commission of which results in injury to
the
Company or an Affiliate; (iv) any violation of any restriction on the
disclosure or use of confidential information of the Company or an Affiliate,
or
client, prospect, or merger or acquisition target, or on competition with the
Company or an Affiliate or any of its businesses as then conducted; or
(v) any other action that the Board or the Committee, in their sole
discretion, may deem to be sufficiently injurious to the interests of the
Company or an Affiliate to constitute substantial cause for termination. The
determination of the Committee as to the existence of cause shall be conclusive
and binding upon the Participant and the Company.
Exhibit
10.3
10
3. Except
as
the Committee may otherwise expressly provide or determine (consistent with
Section 422 of the Code, if applicable), a Participant who is absent from work
with the Company or an Affiliate because of temporary disability (any disability
other than a Disability), or who is on leave of absence for any purpose
permitted by the Company or by any authoritative interpretation (i.e.,
regulation, ruling, case law, etc.) of Section 422 of the Code, shall not,
during the period of any such absence, be deemed, by virtue of such absence
alone, to have terminated his or her employment or relationship with the Company
or with an Affiliate. For
purposes of Incentive Options, no leave of absence may exceed ninety (90) days,
unless reemployment upon expiration of such leave is guaranteed by statute
or
contract (or the Committee approves such longer leave of absence, in which
event
the Incentive Option held by the Participant shall be treated as a Nonstatutory
Option following the ninetieth (90th) day of such leave).
4. Paragraph
F(1) shall control and fix the rights of a Participant who ceases to be an
employee or Key Non-Employee of the Company or of an Affiliate for any reason
other than Disability, death, or termination "for cause," and who subsequently
becomes Disabled or dies. Nothing in Paragraphs G and H of this Article VII
shall be applicable in any such case except that, in the event of such a
subsequent Disability or death within the three (3) month period after the
termination of employment or, if earlier, within the originally prescribed
term
of the Option, the Participant or the Participant's estate or personal
representative may exercise the Option permitted by this Paragraph F, in the
event of Disability, within twelve (12) months after the date that the
Participant ceased to be an employee or Key Non-Employee of the Company or
an
Affiliate, or, in the event of death, within twelve (12) months after the date
of death of such Participant.
G. Total
and Permanent Disability
A
Participant who ceases to be an employee or Key Non-Employee of the Company
or
of an Affiliate by reason of Disability may exercise any Option granted to
such
Participant to the extent that the right to purchase Shares thereunder has
become exercisable on or before the date such Participant becomes Disabled
as
determined by the Committee.
Exhibit
10.3
11
A
Disabled Participant, or his estate or personal representative, shall exercise
such rights, if at all, only within a period of not more than twelve (12) months
after the date that the Participant became Disabled as determined by the
Committee (notwithstanding that the Participant might have been able to exercise
the Option as to some or all of the Shares on a later date if the Participant
had not become Disabled) or, if earlier, within the originally prescribed term
of the Option.
H. Death
In
the
event that a Participant to whom an Option has been granted ceases to be an
employee or Key Non-Employee of the Company or of an Affiliate by reason of
such
Participant's death, such Option, to the extent that the right is exercisable
but not exercised on the date of death, may be exercised by the Participant's
estate or personal representative within twelve (12) months after the date
of
death of such Participant or, if earlier, within the originally prescribed
term
of the Option, notwithstanding that the decedent might have been able to
exercise the Option as to some or all of the Shares on a later date if the
Participant were alive and had continued to be an employee or Key Non-Employee
of the Company or of an Affiliate.
I. Exercise
of Option and Issuance of Stock
Options
shall be exercised by giving written notice to the Company. Such written notice
shall: (i) be signed by the person exercising the Option, (ii) state the number
of Shares with respect to which the Option is being exercised, (iii) contain
the
warranty required by Paragraph M of this Article VII, if applicable, and (iv)
specify a date (other than a Saturday, Sunday or legal holiday) not more than
ten (10) days after the date of such written notice, as the date on which the
Shares will be purchased. Such tender and conveyance shall take place at the
principal office of the Company during ordinary business hours, or at such
other
hour and place agreed upon by the Company and the person or persons exercising
the Option. On the date specified in such written notice (which date may be
extended by the Company in order to comply with any law or regulation that
requires the Company to take any action with respect to the Option Shares prior
to the issuance thereof), the Company shall accept payment for the Option Shares
in cash, by bank or certified check, by wire transfer, or by such other means
as
may be approved by the Committee, and shall deliver to the person or persons
exercising the Option in exchange therefor an appropriate certificate or
certificates for fully paid nonassessable Shares or undertake to deliver an
appropriate certificate or certificates within a reasonable period of time.
In
the event of any failure to pay for the number of Shares specified in such
written notice on the date set forth therein (or on the extended date as above
provided), the right to exercise the Option shall terminate with respect to
such
number of Shares, but shall continue with respect to the remaining Shares
covered by the Option and not yet acquired pursuant thereto.
If
approved in advance by the Committee, and subject to compliance with the
Xxxxxxxx-Xxxxx Act of 2002, payment in full or in part also may be made
(i) by delivering Shares, or by attestation of Shares, already owned for at
least six (6) months by the Participant and which have a total Fair Market
Value
on the date of such delivery equal to the Option price; (ii) by the
execution and delivery of a note or other evidence of indebtedness (and any
security agreement thereunder) satisfactory to the Committee; (iii) by
authorizing the Company to retain Shares that otherwise would be issuable upon
exercise of the Option having a total Fair Market Value on the date of delivery
equal to the Option price; (iv) by the delivery of cash or the extension of
credit by a broker-dealer to whom the Participant has submitted a notice of
exercise or otherwise indicated an intent to exercise an Option (in accordance
with part 220, Chapter II, Title 12 of the Code of Federal
Regulations, a so-called "cashless" exercise); or (v) by any combination of
the foregoing.
Exhibit
10.3
12
J. Rights
as a Stockholder
No
Participant to whom an Option has been granted shall have rights as a
stockholder with respect to any Shares covered by such Option except as to
such
Shares as have been registered in the Company's share register in the name
of
such Participant upon the due exercise of the Option and tender of the full
Option price.
K. Assignability
and Transferability of Option
Unless
otherwise permitted by the Code and by Rule 16b-3 of the Exchange Act [and
by
Section 260.140.41(d) of Title 10 of the California Code of Regulations], if
applicable, and approved in advance by the Committee, an Option granted to
a
Participant shall not be transferable by the Participant and shall be
exercisable, during the Participant's lifetime, only by such Participant or,
in
the event of the Participant's incapacity, his guardian or legal representative.
Except as otherwise permitted herein, such Option shall not be assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment, or similar process and any
attempted transfer, assignment, pledge, hypothecation or other disposition
of
any Option or of any rights granted thereunder contrary to the provisions of
this Paragraph K, or the levy of any attachment or similar process upon an
Option or such rights, shall be null and void.
L. Other
Provisions
The
Award
Agreement for an Incentive Option shall contain such limitations and
restrictions upon the exercise of the Option as shall be necessary in order
that
such Option qualifies as an "incentive stock option" within the meaning of
Section 422 of the Code. Further, the Award Agreements authorized under the
Plan
shall be subject to such other terms and conditions including, without
limitation, restrictions upon the exercise of the Option, as the Committee
shall
deem advisable and which, in the case of Incentive Options, are not inconsistent
with the requirements of Section 422 of the Code.
Exhibit
10.3
13
M. Purchase
for Investment
If
Shares
to be issued upon the particular exercise of an Option shall not have been
effectively registered under the Securities Act of 1933, as now in force or
hereafter amended, the Company shall be under no obligation to issue the Shares
covered by such exercise unless and until the following conditions have been
fulfilled. The person who exercises such Option shall warrant to the Company
that, at the time of such exercise, such person is acquiring his or her Option
Shares for investment and not with a view to, or for sale in connection with,
the distribution of any such Shares, and shall make such other representations,
warranties, acknowledgments, and/or affirmations, if any, as the Committee
may
require. In such event, the person acquiring such Shares shall be bound by
the
provisions of the following legend (or similar legend) which shall be endorsed
upon the certificate(s) evidencing his or her Option Shares issued pursuant
to
such exercise.
"The
shares represented by this certificate have been acquired for investment and
they may not be sold or otherwise transferred by any person, including a
pledgee, in the absence of an effective registration statement for the shares
under the Securities Act of 1933 or an opinion of counsel satisfactory to the
Company that an exemption from registration is then available."
Without
limiting the generality of the foregoing, the Company may delay issuance of
the
Shares until completion of any action or obtaining any consent that the Company
deems necessary under any applicable law (including without limitation state
securities or "blue sky" laws).
VIII. TERMS
AND CONDITIONS OF RESTRICTED STOCK
A. The
Committee may from time to time grant an Award in Shares of Common Stock or
grant an Award denominated in units of Common Stock, for such consideration
as
the Committee deems appropriate (which amount may be less than the Fair Market
Value of the Common Stock on the date of the Award), and subject to such
restrictions and conditions and other terms as the Committee may determine
at
the time of the Award (including, but not limited to, continuous service with
the Company or its Affiliates, achievement of specific business objectives,
increases in specified indices, attainment of growth rates, and/or other
measurements of Company or Affiliate performance), and subject further to the
general provisions of the Plan, the applicable Award Agreement, and the
following specific rules.
B. If
Shares
of Restricted Stock are awarded, such Shares cannot be assigned, sold,
transferred, pledged, or hypothecated prior to the lapse of the restrictions
applicable thereto, and, in no event, absent Committee approval, prior to six
(6) months from the date of the Award. The Company shall issue, in the name
of
the Participant, stock certificates representing the total number of Shares
of
Restricted Stock awarded to the Participant, as soon as may be reasonably
practicable after the grant of the Award, which certificates shall be held
by
the Secretary of the Company as provided in Paragraph G.
Exhibit
10.3
14
C. Restricted
Stock issued to a Participant under the Plan shall be governed by an Award
Agreement that shall specify whether Shares of Common Stock are awarded to
the
Participant, or whether the Award shall be one not of Shares of Common Stock
but
one denominated in units of Common Stock, any consideration required thereto,
and such other provisions as the Committee shall determine.
D. Subject
to the provisions of Paragraphs B and E hereof and the restrictions set
forth in the related Award Agreement, the Participant receiving an Award of
Shares of Restricted Stock shall thereupon be a stockholder with respect to
all
of the Shares represented by such certificate or certificates and shall have
the
rights of a stockholder with respect to such Shares, including the right to
vote
such Shares and to receive dividends and other distributions made with respect
to such Shares. All Common Stock received by a Participant as the result of
any
dividend on the Shares of Restricted Stock, or as the result of any stock split,
stock distribution, or combination of the Shares affecting Restricted Stock,
shall be subject to the restrictions set forth in the related Award
Agreement.
E. Restricted
Stock or units of Restricted Stock awarded to a Participant pursuant to the
Plan
will be forfeited, and any Shares of Restricted Stock or units of Restricted
Stock sold to a Participant pursuant to the Plan may, at the Company's option,
be resold to the Company for an amount equal to the price paid therefore, and
in
either case, such Restricted Stock or units of Restricted Stock shall revert
to
the Company, if the Company so determines in accordance with Article XVI or
any other condition set forth in the Award Agreement, or, alternatively, if
the
Participant's employment with the Company or its Affiliates terminates, other
than for reasons set forth in Article XV, prior to the expiration of the
forfeiture or restriction provisions set forth in the Award
Agreement.
F. The
Committee, in its discretion, shall have the power to accelerate the date on
which the restrictions contained in the Award Agreement shall lapse with respect
to any or all Restricted Stock awarded under the Plan.
G. The
Secretary of the Company shall hold the certificate or certificates representing
Shares of Restricted Stock issued under the Plan, properly endorsed for
transfer, on behalf of each Participant who holds such Shares, until such time
as the Shares of Restricted Stock are forfeited, resold to the Company, or
the
restrictions lapse. Any Restricted Stock denominated in units of Common Stock,
if not previously forfeited, shall be payable in accordance with
Article XVII as soon as practicable after the restrictions
lapse.
H. The
Committee may prescribe such other restrictions, conditions, and terms
applicable to Restricted Stock issued to a Participant under the Plan that
are
neither inconsistent with nor prohibited by the Plan or the Award Agreement,
including, without limitation, terms providing for a lapse of the restrictions
of this Article or any Award Agreement in installments.
Exhibit
10.3
15
IX. TERMS
AND CONDITIONS OF STOCK APPRECIATION RIGHTS
If
deemed
by the Committee to be in the best interests of the Company, a Participant
may
be granted a Right. Each Right shall be granted subject to such restrictions
and
conditions and other terms as the Committee may specify in the Award Agreement
at the time the Right is granted, subject to the general provisions of the
Plan,
and the following specific rules.
A. Rights
may be granted, if at all, either singly, in combination with another Award,
or
in tandem with another Award. At the time of grant of a Right, the Committee
shall specify the base price of Common Stock to be used in connection with
the
calculation described in Paragraph B below, provided that the base price
shall not be less than one hundred percent (100%) of the Fair Market Value
of a
Share of Common Stock on the date of grant, unless approved by the
Board.
B. Upon
exercise of a Right, which shall be not less than six (6) months from the date
of the grant, the Participant shall be entitled to receive in accordance with
Article XVII, and as soon as practicable after exercise, the excess of the
Fair Market Value of one Share of Common Stock on the date of exercise over
the
base price specified in such Right, multiplied by the number of Shares of Common
Stock then subject to the Right, or the portion thereof being
exercised.
C. Notwithstanding
anything herein to the contrary, if the Award granted to a Participant allows
him or her to elect to cancel all or any portion of an unexercised Option by
exercising an additional or tandem Right, then the Option price per Share of
Common Stock shall be used as the base price specified in Paragraph A to
determine the value of the Right upon such exercise and, in the event of the
exercise of such Right, the Company's obligation with respect to such Option
or
portion thereof shall be discharged by payment of the Right so exercised. In
the
event of such a cancellation, the number of Shares as to which such Option
was
canceled shall become available for use under the Plan, less the number of
Shares, if any, received by the Participant upon such cancellation in accordance
with Article XVI.
D. A
Right
may be exercised only by the Participant (or, if applicable under
Article XV, by a legatee or legatees of such Right, or by the Participant's
executors, personal representatives, or distributees).
X.
|
TERMS
AND CONDITIONS OF DIVIDEND
EQUIVALENTS
|
A
Participant may be granted an Award in the form of Dividend Equivalents. Such
an
Award shall entitle the Participant to receive cash, Shares, other Awards or
other property equal in value to dividends paid with respect to a specified
number of Shares. Dividend Equivalents may be awarded on a free-standing basis
or in connection with another Award. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall be deemed to
have
been reinvested in additional Shares, Awards or other investment vehicles,
and
subject to such restrictions on transferability and risks of forfeiture, as
the
Committee may specify.
Exhibit
10.3
16
XI.
|
TERMS
AND CONDITIONS OF OTHER STOCK-BASED
AWARDS
|
The
Committee, in its sole discretion, may grant Awards of Shares and/or Awards
that
are valued in whole or in part by reference to, or are otherwise based on,
Shares or on the Fair Market Value thereof (“Other Stock-Based Awards”). Such
Other Stock-Based Awards shall be in such form, and dependent on such
conditions, as the Committee shall determine, including, without limitation,
the
right to receive, or vest with respect to, one or more Shares (or the equivalent
cash value of such Shares) upon the completion of a specified period of service,
the occurrence of an event and/or the attainment of performance objectives.
Other Stock-Based Awards may be granted alone or in addition to any other Awards
granted under the Plan. Subject to the provisions of the Plan, the Committee
shall determine the number of Shares to be awarded to a Participant under (or
otherwise related to) such Other Stock-Based Awards and all other terms and
conditions of such Awards (including, without limitation, the vesting provisions
thereof and provisions ensuring that all Shares so awarded and issued shall
be
fully paid and non-assessable).
XII.
|
TERMS
AND CONDITIONS OF PERFORMANCE
AWARDS
|
A. A
Participant may be granted an Award that is subject to performance conditions
specified by the Committee. The Committee may use business criteria and/or
other
measures of performance as it deems appropriate in establishing any performance
conditions (including, but not limited to, continuous service with the Company
or its Affiliates, achievement of specific business objectives, increases in
specified indices, attainment of growth rates, and/or other measurements of
Company or Affiliate performance), and may exercise its discretion to reduce
or
increase the amounts payable under any Award subject to performance conditions,
except as otherwise limited under Paragraphs C and D, below, in the case of
a
Performance Award intended to qualify under Code Section 162(m).
B. Any
Performance Award will be forfeited if the Company so determines in accordance
with Article XV or any other condition set forth in the Award Agreement,
or, alternatively, if the Participant's employment with the Company or its
Affiliates terminates, other than for reasons set forth in Article XIV, prior
to
the expiration of the time period over which the performance conditions are
to
be measured.
C. If
the
Committee determines that a Performance Award to be granted to an Eligible
Employee should qualify as "performance-based compensation" for purposes of
Code
Section 162(m), the grant and/or settlement of such Performance Award shall
be
contingent upon achievement of pre-established performance goals and other
terms
set forth in this Paragraph C.
1. Performance
Goals Generally.
The
performance goals for such Performance Awards shall consist of one or more
business criteria and a targeted level or levels of performance with respect
to
such criteria, as specified by the Committee consistent with this
Paragraph C. Performance goals shall be objective and shall otherwise meet
the requirements of Code Section 162(m), including the requirement that the
level or levels of performance targeted by the Committee result in the
performance goals being "substantially uncertain." The Committee may determine
that more than one performance goal must be achieved as a condition to
settlement of such Performance Awards. Performance goals may differ for
Performance Awards granted to any one Participant or to different
Participants.
Exhibit
10.3
17
2. Business
Criteria.
One or
more of the following business criteria for the Company, on a consolidated
basis, and/or for specified Affiliates or business units of the Company (except
with respect to the total stockholder return and earnings per share criteria),
shall be used exclusively by the Committee in establishing performance goals
for
such Performance Awards: (a) total stockholder return; (b) such total
stockholder return as compared to the total return (on a comparable basis)
of a
publicly available index such as, but not limited to, the Standard &
Poor's 500 or the Nasdaq-U.S. Index; (c) net income or net operating
income; (d) pre-tax earnings or profits; (e) EBIT or EBITDA;
(f) pre-tax operating earnings after interest expense and before bonuses,
service fees, and extraordinary or special items; (g) operating margin;
(h) earnings per share or growth in earnings per share; (i) return on
equity; (j) return on assets or capital; (k) return on investment;
(l) operating income, excluding the effect of charges for acquired
in-process technology and before payment of executive bonuses; (m) earnings
per share, excluding the effect of charges for acquired in-process technology
and before payment of executive bonuses; (n) working capital;
(o) sales; (p) gross or net revenues or changes in gross or net
revenues; (q) market share or market penetration with respect to designated
products and/or geographic areas; (r) reduction of losses, loss ratios or
expense ratios; (s) cost of capital; (t) debt reduction;
(u) satisfaction of business expansion goals or goals relating to
acquisitions or divestitures; and/or (v) employee turnover. The foregoing
business criteria also may be used in establishing performance goals for Cash
Awards granted under Article XIII hereof.
3. Compensation
Limitation.
No
Eligible Employee may receive a Performance Award in excess of $2,000,000 during
any three (3) year period.
D. Achievement
of performance goals in respect of such Performance Awards shall be measured
over such periods as may be specified by the Committee. Performance goals shall
be established on or before the dates that are required or permitted for
"performance-based compensation" under Code Section 162(m).
E. Settlement
of Performance Awards may be in cash or Shares, or other property, in the
discretion of the Committee. The Committee may, in its discretion, reduce the
amount of a settlement otherwise to be made in connection with such Performance
Awards, but may not exercise discretion to increase any such amount payable
in
respect of a Performance Award that is subject to Code Section
162(m).
Exhibit
10.3
18
XIII. TERMS
AND CONDITIONS OF CASH AWARDS
A. The
Committee may from time to time authorize the award of cash payments under
the
Plan to Participants, subject to such restrictions and conditions and other
terms as the Committee may determine at the time of authorization (including,
but not limited to, continuous service with the Company or its Affiliates,
achievement of specific business objectives, increases in specified indices,
attainment of growth rates, and/or other measurements of Company or Affiliate
performance), and subject to the general provisions of the Plan, the applicable
Award Agreement, and the following specific rules.
B. Any
Cash
Award will be forfeited if the Company so determines in accordance with
Article XV or any other condition set forth in the Award Agreement, or,
alternatively, if the Participant's employment or engagement with the Company
or
its Affiliates terminates, other than for reasons set forth in Article XIV,
prior to the attainment of any goals set forth in the Award Agreement or prior
to the expiration of the forfeiture or restriction provisions set forth in
the
Award Agreement, whichever is applicable.
C. The
Committee, in its discretion, shall have the power to change the date on which
the restrictions contained in the Award Agreement shall lapse, or the date
on
which goals are to be measured, with respect to any Cash Award.
D. Any
Cash
Award, if not previously forfeited, shall be payable in accordance with Article
XVI as soon as practicable after the restrictions lapse or the goals are
attained.
E. The
Committee may prescribe such other restrictions, conditions, and terms
applicable to the Cash Awards issued to a Participant under the Plan that are
neither inconsistent with nor prohibited by the Plan or the Award Agreement,
including, without limitation, terms providing for a lapse of the restrictions,
or a measurement of the goals, in installments.
XIV. TERMINATION
OF EMPLOYMENT OR SERVICE
Except
as
may otherwise be (i) provided in Article VII for Options,
(ii) provided for under the Award Agreement, or (iii) permitted
pursuant to Paragraphs A through C of this Article XV (subject to the
limitations under the Code for Incentive Options), if the employment or service
of a Participant terminates, all unexpired, unpaid, unexercised, or deferred
Awards shall be canceled immediately.
A. Retirement
under a Company or Affiliate Retirement Plan.
When a
Participant's employment or service terminates as a result of retirement as
defined under a Company or Affiliate retirement plan, the Committee may permit
Awards to continue in effect beyond the date of retirement in accordance with
the applicable Award Agreement, and/or the exercisability and vesting of any
Award may be accelerated.
B. Termination
in the Best Interests of the Company or an Affiliate.
When a
Participant’s employment or service with the Company or an Affiliate terminates
and, in the judgment of the chief executive officer or other senior officer
designated by the Committee, the acceleration and/or continuation of outstanding
Awards would be in the best interests of the Company, the Committee may (i)
authorize, where appropriate, the acceleration and/or continuation of all or
any
part of Awards granted prior to such termination and/or (ii) permit the
exercise, vesting, and payment of such Awards for such period as may be set
forth in the applicable Award Agreement, subject to earlier cancellation
pursuant to Article XV or at such time as the Committee shall deem the
continuation of all or any part of the Participant's Awards are not in the
Company's or its Affiliate's best interests.
Exhibit
10.3
19
C. Death
or Disability of a Participant.
1. In
the
event of a Participant's death, the Participant's estate or beneficiaries shall
have a period up to the earlier of (i) the expiration date specified in the
Award Agreement, or (ii) the expiration date specified in Paragraph H of
Article VII, within which to receive or exercise any outstanding Awards
held by the Participant under such terms as may be specified in the applicable
Award Agreement. Rights to any such outstanding Awards shall pass by will or
the
laws of descent and distribution in the following order: (a) to beneficiaries
so
designated by the Participant; (b) to a legal representative of the
Participant; or (c) to the persons entitled thereto as determined by a
court of competent jurisdiction. Awards so passing shall be paid and/or may
be
exercised at such times and in such manner as if the Participant were
living.
2. In
the
event a Participant is determined by the Company to be Disabled, and subject
to
the limitations of Paragraph G of Article VII, Awards may be paid to, or
exercised by, the Participant, if legally competent, or by a legally designated
guardian or other representative if the Participant is legally incompetent
by
virtue of such Disability.
3. After
the
death or Disability of a Participant, the Committee may in its sole discretion
at any time (i) terminate restrictions in Award Agreements;
(ii) accelerate any or all installments and rights; and/or
(iii) instruct the Company to pay the total of any accelerated payments in
a lump sum to the Participant, the Participant's estate, beneficiaries or
representative, notwithstanding that, in the absence of such termination of
restrictions or acceleration of payments, any or all of the payments due under
the Awards ultimately might have become payable to other
beneficiaries.
XV. CANCELLATION
AND RESCISSION OF AWARDS
Unless
the Award Agreement specifies otherwise, the Committee may cancel any unexpired,
unpaid, unexercised, or deferred Awards at any time if the Participant is not
in
compliance with the applicable provisions of the Award Agreement, the Plan,
or
with the following conditions:
A. A
Participant shall not breach any protective agreement entered into between
him
or her and the Company or any Affiliates, or render services for any
organization or engage directly or indirectly in any business which, in the
judgment of the chief executive officer of the Company or other senior officer
designated by the Committee, is or becomes competitive with the Company, or
which organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to or in conflict
with the interests of the Company. For a Participant whose employment or
engagement has terminated, the judgment of the chief executive officer shall
be
based on the terms of the protective agreement, if applicable, or on the
Participant's position and responsibilities while employed or engaged by the
Company or its Affiliates, the Participant's post-employment/engagement
responsibilities and position with the other organization or business, the
extent of past, current, and potential competition or conflict between the
Company and the other organization or business, the effect of the Participant's
assuming the post-employment/engagement position on the Company's or its
Affiliate's customers, suppliers, investors, and competitors, and such other
considerations as are deemed relevant given the applicable facts and
circumstances. A Participant may, however, purchase as an investment or
otherwise, stock or other securities of any organization or business so long
as
they are listed upon a recognized securities exchange or traded
over-the-counter, and such investment does not represent a substantial
investment to the Participant or a greater than one percent (1%) equity interest
in the organization or business.
Exhibit
10.3
20
B. A
Participant shall not, without prior written authorization from the Company,
disclose to anyone outside the Company or its Affiliates, or use in other than
the Company's or Affiliate's business, any confidential information or materials
relating to the business of the Company or its Affiliates, acquired by the
Participant either during or after his or her employment or engagement with
the
Company or its Affiliates.
C. A
Participant shall disclose promptly and assign to the Company all right, title,
and interest in any invention or idea, patentable or not, made or conceived
by
the Participant during employment or engagement with the Company or an
Affiliate, relating in any manner to the actual or anticipated business,
research, or development work of the Company or its Affiliates, and shall do
anything reasonably necessary to enable the Company or its Affiliates to secure
a patent, trademark, copyright, or other protectable interest where appropriate
in the United States and in foreign countries.
Upon
exercise, payment, or delivery pursuant to an Award, the Participant shall
certify on a form acceptable to the Committee that he or she is in compliance
with the terms and conditions of the Plan, including the provisions of
Paragraphs A, B or C of this Article XV. Failure to comply with the
provisions of Paragraphs A, B or C of this Article XV at any time
prior to, or during the one (1) year period after, the date Participant’s
employment or engagement with the Company or any Affiliate terminates shall
cause any exercise, payment, or delivery which occurred during the two (2)
year
period prior to the breach of Paragraph A, B or C of this Article XV
to be rescinded. The Company shall notify the Participant in writing of any
such
rescission within one (1) year of the date it acquires actual knowledge of
such
breach. Within ten (10) days after receiving such a notice from the Company,
the
Participant shall pay to the Company the amount of any gain realized or payment
received as a result of the exercise, payment, or delivery pursuant to the
Award. Such payment shall be made either in cash or by returning to the Company
the number of Shares of Common Stock that the Participant received in connection
with the rescinded exercise, payment, or delivery.
Exhibit
10.3
21
XVI.
|
PAYMENT
OF RESTRICTED STOCK, RIGHTS, OTHER STOCK-BASED AWARDS, PERFORMANCE
AWARDS
AND CASH AWARDS
|
Payment
of Restricted Stock, Rights, Other Stock-Based Awards, Performance Awards and
Cash Awards may be made, as the Committee shall specify, in the form of cash,
Shares of Common Stock, or combinations thereof; provided, however, that a
fractional Share of Common Stock shall be paid in cash equal to the Fair Market
Value of the fractional Share of Common Stock at the time of
payment.
XVII. WITHHOLDING
Except
as
otherwise provided by the Committee,
A. the
Company shall have the power and right to deduct or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy the minimum
federal, state, and local taxes required by law to be withheld with respect
to
any grant, exercise, or payment made under or as a result of this Plan;
and
B. in
the
case of payments of Awards, or upon any other taxable event hereunder, a
Participant may elect, subject to the approval in advance by the Committee,
to
satisfy the withholding requirement, if any, in whole or in part, by having
the
Company withhold Shares of Common Stock that would otherwise be transferred
to
the Participant having a Fair Market Value, on the date the tax is to be
determined, equal to the minimum marginal tax that could be imposed on the
transaction. All elections shall be made in writing and signed by the
Participant.
XVIII. SAVINGS
CLAUSE
This
Plan
is intended to comply in all respects with applicable law and regulations,
including, (i) with respect to those Participants who are officers or
directors for purposes of Section 16 of the Exchange Act, Rule 16b-3
of the Securities and Exchange Commission, if applicable,
(ii) Section 402 of the Xxxxxxxx-Xxxxx Act, and (iii) with
respect to executive officers, Code Section 162(m). In case any one or more
provisions of this Plan shall be held invalid, illegal, or unenforceable in
any
respect under applicable law and regulation (including Rule 16b-3 and Code
Section 162(m)), the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby and the invalid,
illegal, or unenforceable provision shall be deemed null and void; however,
to
the extent permitted by law, any provision that could be deemed null and void
shall first be construed, interpreted, or revised retroactively to permit this
Plan to be construed in compliance with all applicable law (including
Rule 16b-3 and Code Section 162(m)) so as to xxxxxx the intent of this
Plan. Notwithstanding anything herein to the contrary, with respect to
Participants who are officers and directors for purposes of Section 16 of
the Exchange Act, if applicable, and if required to comply with rules
promulgated thereunder, no grant of, or Option to purchase, Shares shall permit
unrestricted ownership of Shares by the Participant for at least six (6) months
from the date of grant or Option, unless the Board determines that the grant
of,
or Option to purchase, Shares otherwise satisfies the then current Rule 16b-3
requirements.
Exhibit
10.3
22
XIX. ADJUSTMENTS
UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS
If
the
outstanding Shares of the Company are changed into or exchanged for a different
number or kind of shares or other securities of the Company or of another
corporation by reason of any reorganization, merger, or consolidation, or if
a
change is made to the Common Stock of the Company by reason of any
recapitalization, reclassification, change in par value, stock split, reverse
stock split, combination of shares or dividends payable in capital stock, or
the
like, the Company shall make adjustments to such Awards (including, by way
of
example and not by way of limitation, the grant of substitute Awards under
the
Plan or under the plan of such other corporation) as it may determine to be
appropriate under the circumstances, and, in addition, appropriate adjustments
shall be made in the number and kind of shares and in the option price per
share
subject to outstanding Awards under the Plan or under the plan of such successor
corporation. The foregoing notwithstanding, unless the Committee otherwise
determines, no such adjustment shall be made to an Incentive Option which shall,
within the meaning of Section 424 of the Code, constitute such a modification,
extension, or renewal of an option as to cause it to be considered as the grant
of a new option.
Notwithstanding
anything herein to the contrary, the Company may, in its sole discretion,
accelerate the timing of the exercise provisions of any Award in the event
of
(i) the adoption of a plan of merger or consolidation under which a
majority of the Shares of the Company would be eliminated, or (ii) a sale
of all or any portion of the Company's assets or capital stock. Alternatively,
the Company may, in its sole discretion, cancel any or all Awards upon any
of
the foregoing events and provide for the payment to Participants in cash of
an
amount equal to the value or appreciated value, whichever is applicable, of
the
Award, as determined in good faith by the Committee, at the close of business
on
the date of such event.
Upon
a
business combination by the Company or any of its Affiliates with any
corporation or other entity through the adoption of a plan of merger or
consolidation or a share exchange or through the purchase of all or
substantially all of the capital stock or assets of such other corporation
or
entity, the Board or the Committee may, in its sole discretion, grant Options
pursuant hereto to all or any persons who, on the effective date of such
transaction, hold outstanding options to purchase securities of such other
corporation or entity and who, on and after the effective date of such
transaction, will become employees or directors of, or consultants or advisors
to, the Company or its Affiliates. The number of Shares subject to such
substitute Options shall be determined in accordance with the terms of the
transaction by which the business combination is effected. Notwithstanding
the
other provisions of this Plan, the other terms of such substitute Options shall
be substantially the same as or economically equivalent to the terms of the
options for which such Options are substituted, all as determined by the Board
or by the Committee, as the case may be. Upon the grant of substitute Options
pursuant hereto, the options to purchase securities of such other corporation
or
entity for which such Options are substituted shall be canceled
immediately.
Exhibit
10.3
23
XX. DISSOLUTION
OR LIQUIDATION OF THE COMPANY
Upon
the
dissolution or liquidation of the Company other than in connection with a
transaction to which Article XIX is applicable, all Awards granted
hereunder shall terminate and become null and void; provided, however, that
if
the rights of a Participant under the applicable Award have not otherwise
terminated and expired, the Participant may, if the Committee, in its sole
discretion, so permits, have the right immediately prior to such dissolution
or
liquidation to exercise any Award granted hereunder to the extent that the
right
thereunder has become exercisable as of the date immediately prior to such
dissolution or liquidation.
XXI. TERMINATION
OF THE PLAN
The
Plan
shall terminate ten (10) years from the earlier of the date of its adoption
by
the Board or the date of its approval by the stockholders. The Plan may be
terminated at an earlier date by vote of the stockholders or the Board;
provided, however, that any such earlier termination shall not affect any Award
Agreements executed prior to the effective date of such termination.
Notwithstanding anything in this Plan to the contrary, any Options granted
prior
to the effective date of the Plan's termination may be exercised until the
earlier of (i) the date set forth in the Award Agreement, or (ii) in the case
of
an Incentive Option, ten (10) years from the date the Option is granted; and
the
provisions of the Plan with respect to the full and final authority of the
Committee under the Plan shall continue to control.
XXII. AMENDMENT
OF THE PLAN
The
Plan
may be amended by the Board and such amendment shall become effective upon
adoption by the Board; provided, however, that any amendment shall be subject
to
the approval of the stockholders of the Company at or before the next annual
meeting of the stockholders of the Company if such stockholder approval is
required by the Code, any federal or state law or regulation, the rules of
any
stock exchange or automated quotation system on which the Shares may be listed
or quoted, or if the Board, in its discretion, determines to submit such changes
to the Plan to its stockholders for approval.
XXIII. EMPLOYMENT
RELATIONSHIP
Nothing
herein contained shall be deemed to prevent the Company or an Affiliate from
terminating the employment of a Participant, nor to prevent a Participant from
terminating the Participant's employment with the Company or an Affiliate,
unless otherwise limited by an agreement between the Company (or an Affiliate)
and the Participant.
Exhibit
10.3
24
XXIV.
INDEMNIFICATION OF COMMITTEE
In
addition to such other rights of indemnification as they may have as directors
or as members of the Committee, the members of the Committee shall be
indemnified by the Company against all reasonable expenses, including attorneys'
fees, actually and reasonably incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken by them as
directors or members of the Committee and against all amounts paid by them
in
settlement thereof (provided such settlement is approved by the Board) or paid
by them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that the director or Committee member is liable for gross
negligence or willful misconduct in the performance of his or her duties. To
receive such indemnification, a director or Committee member must first offer
in
writing to the Company the opportunity, at its own expense, to defend any such
action, suit or proceeding.
XXV. UNFUNDED
PLAN
Insofar
as it provides for payments in cash in accordance with Article XVI, or
otherwise, the Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Participants who are entitled to cash, Common Stock,
or rights thereto under the Plan, any such accounts shall be used merely as
a
bookkeeping convenience. The Company shall not be required to segregate any
assets that may at any time be represented by cash, Common Stock, or rights
thereto, nor shall the Plan be construed as providing for such segregation,
nor
shall the Company, the Board, or the Committee be deemed to be a trustee of
any
cash, Common Stock, or rights thereto to be granted under the Plan. Any
liability of the Company to any Participant with respect to a grant of cash,
Common Stock, or rights thereto under the Plan shall be based solely upon any
contractual obligations that may be created by the Plan and any Award Agreement;
no such obligation of the Company shall be deemed to be secured by any pledge
or
other encumbrance on any property of the Company. Neither the Company nor the
Board nor the Committee shall be required to give any security or bond for
the
performance of any obligation that may be created by the Plan.
XXVI. MITIGATION
OF EXCISE TAX
Unless
otherwise provided for in the Award Agreement or in any other agreement between
the Company (or an Affiliate) and the Participant, if any payment or right
accruing to a Participant under this Plan (without the application of this
Article XXVI), either alone or together with other payments or rights
accruing to the Participant from the Company or an Affiliate, would constitute
a
"parachute payment" (as defined in Section 280G of the Code and regulations
thereunder), such payment or right shall be reduced to the largest amount or
greatest right that will result in no portion of the amount payable or right
accruing under the Plan being subject to an excise tax under Section 4999 of
the
Code or being disallowed as a deduction under Section 280G of the Code. The
determination of whether any reduction in the rights or payments under this
Plan
is necessary shall be made by the Company. The Participant shall cooperate
in
good faith with the Company in making such determination and providing any
necessary information for this purpose.
Exhibit
10.3
25
XXVII. EFFECTIVE
DATE
This
Plan
shall become effective upon adoption by the Board, provided that the
adoption of the Plan shall be subject to the approval of the stockholders of
the
Company if such stockholder approval is required by the Code, any federal or
state law or regulations, the rules of any stock exchange or automated quotation
system on which the Shares may be listed or quoted, or if the Board, in its
discretion, desires to submit the Plan to its stockholders for
approval.
XXVIII. INFORMATION
The
Company shall provide to each Participant, during the period for which such
Participant has one or more Awards outstanding, copies of financial statements
at least annually.
XXIX. FOREIGN
JURISDICTIONS
To
the
extent the Committee determines that the restrictions imposed by the Plan
preclude the achievement of the material purposes of the Plan in jurisdictions
outside the United States of America, the Committee in its discretion may modify
those restrictions as it determines to be necessary or appropriate to conform
to
applicable requirements or practices of jurisdictions outside of the United
States of America.
XXX. DEFERRAL
OF AWARDS
The
Company may permit a Participant to:
(a)
|
have
cash that otherwise would be paid to such Participant as a result
of the
exercise of an Award credited to a deferred compensation account
established for such Participant by the Committee as an entry on
the
Company’s books;
|
(b)
|
have
Shares that otherwise would be delivered to such Participant as a
result
of the exercise of an Award converted into an equal number of Rights;
or
|
(c)
|
have
Shares that otherwise would be delivered to such Participant as a
result
of the exercise of an Award converted into amounts credited to a
deferred
compensation account established for such Participant by the Committee
as
an entry on the Company’s books. Such amounts shall be determined by
reference to the Fair Market Value of the Shares as of the date on
which
they otherwise would have been delivered to such
Participant.
|
A
deferred compensation account established under this Article XXX may be
credited with interest or other forms of investment return, as determined by
the
Committee. A Participant for whom such an account is established shall have
no
rights other than those of a general creditor of the Company. Such an account
shall represent an unfunded and unsecured obligation of the Company and shall
be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is
permitted or required, the Committee may establish rules, procedures and forms
pertaining to such Awards, including (without limitation) the settlement of
deferred compensation accounts established under this
Article XXX.
Exhibit
10.3
26
XXXI.
GOVERNING LAW
This
Plan
shall be governed by the laws of the State of Delaware and construed in
accordance therewith.
Adopted
this ____ day of November, 2004.
Exhibit
10.3
27